Tag Archives: economy

Faith Healers, Frauds, and Flim-flam

I have to admit I’m experiencing no small amount of schadenfreude at watching the pro-Kremlin “political analysts” and “geopolitical experts” squirm and sweat more and more as the Russian economy continues its meltdown.  Up till the last few months of 2014, these guys had it easy. Many of Russia’s economic woes were more or less unknown to anyone who wasn’t specifically looking for them.  Perhaps even some of these Western-based “experts” were or perhaps still are unaware of Russia’s underlying economic problems, which were stewing long before 2014, the sanctions, the plummeting price of oil, and the collapse of the ruble. This meant that at worst, their predictions about the abandonment of the dollar as the world’s reserve currency, its subsequent collapse into worthless paper, and the meteoric rise of a new Russian superpower at the head of an anti-American BRICS alliance simply hadn’t yet come to fruition. They could always throw out some random figures and say that the rapture would come next year.

Now those days are long past, gone for the foreseeable future. It’s clear to everyone the world over that Russia’s economy is fucked. Even president Putin himself implicitly admitted this in his 2014 year-end press conference. At the end of December it was, “The ruble should remain stable so long as the oil price doesn’t continue to fall.” A couple weeks later and it…continued to fall, taking the ruble down with it. Every year these people told us that the collapse of the dollar was immanent, and then the ruble collapsed instead. Russia was supposed to be ascendant, while the US was on the verge of economic ruin. Now even a superficial look at both countries reveals quite clearly which one is currently on the brink of financial ruin and crisis.

I cannot stress enough how badly these people have fucked up. You make a prediction; it doesn’t come true. Fine, maybe it will come true later. Fortune tellers bank on that all the time. But it’s a very different story when you make a prediction and then the opposite happens. In other words- This isn’t like predicting the rapture and then seeing the appointed day pass without incident. This is predicting the rapture, and then being publicly visited by a physical manifestation of Odin or perhaps Quetzalcoatl, informing you and your followers that Christianity is the wrong religion.

As it becomes more and more difficult to deny Russia’s rapidly deteriorating condition, there has been a significant shift in tone from Team Russia’s cheerleaders in the West. They continue to harp on any negative news they get out of the US or EU, but when it comes to Russia they’re suddenly talking more and more about China and India. Oddly enough they aren’t ditching Russia for China, which would actually be a very logical choice given the circumstances. No, instead of picking a winner they are busy swallowing the Kremlin’s line about how China, India, Turkey, and perhaps in the future Botswana, Turkmenistan, and Burkina Faso will all save Russia. Yes, you foolish dupes of the Western media! This is all part of Putin’s brilliant gambit! He’s playing the long game! His masterful, Machiavellian plan involves getting Russia into unequal agreements with much more powerful economies that continue to carry on massive trade with the West! He’ll bide his time and then…spring the trap! You’ll see! You’ll all see!  You fools! This is all part of the plan! You fell for Putin’s clever ruse! 

Seriously though, don’t expect these people to disappear any time soon, especially those who work for publications or websites that are backed with Kremlin money. For one thing, most of these people continue to support the narrative because in spite of their formal education or their age, they still know very little about how the world works or the countries they are supposedly “analyzing.” This is why some of them seem to have fallen for the Russian media’s implication that China or India’s agreements with Russia somehow represent those two countries’ turn away from the West. These countries still carry on lucrative trade with the US and Europe, and that plus Western investment is worth far too much to them to throw it all away in favor of making Putin’s dream of a Russian empire come true. They also continue to pay for their Russian energy in dollars, in spite of Russian pleas to use local currencies which go back for years. These “geopolitical experts” and “analysts” never see any of that. They look at a map like it’s the board game Risk, and when Putin pays a visit to China or India they imagine these countries are now in one camp.

Another reason why these people will not disappear is because there are certain factors which make it possible to continually make incorrect predictions without getting caught. In his book The Faith Healers, former “conjurer” James Randi, the bane of psychics, frauds, faith healers, quacks, and parapsychologists the world over, explained why alternative medicine quacks and faith healers can have long, lucrative careers no matter how many patients fail to recover or even die. Without getting into too much detail, he explains how many conditions, including terminal ones, often have ups and downs until the patient either gets better or dies.  This means that depending on when the healer or quack initiates the treatment, they can use several explanations to demonstrate the efficacy of their methods. They are as follows:

Healer initiates treatment, patient recovers:  “The treatment works!”

Healer initiates the treatment, patient’s condition doesn’t change: “The treatment has stabilized the condition.”

Healer initiates treatment, patient gets worse: We may have applied the treatment too late to save the patient.

Team Russia’s Western cheerleading squad have a set of similar variables. I can already see how the Russian media and some of the Kremlin’s astroturf movements on the net celebrate every tiny increase in the ruble’s value, every little uptick in the price of oil, all in spite of the general downward trend of both. Expect this kind of off-and-on celebration from the geopolitical wonks from now on, seeing as how their sources all ultimately lead back to the Russian press. If exchange rates and the price of oil remain more or less the same for 48 hours, they’ll tell us that the situation has stabilized.  What is more, unlike the faith healers and alternative medicine quacks, these people can also fall back on other excuses, such as “The CIA’s behind it,” “You must work for the State Department,” and “Do you think the dollar will last forever?!

Truth be told, many of these people won’t stop because they are simply too invested in the fantasy, which in some cases is a part of their identity.  They need Russia to be that ally that supposedly stands up to their own government. Some of them actually moved to Russia and they need to justify betting on that horse. The mental heuristic in this case resembles that which causes PC users to tangle with Mac users, and Xbox fans to fight it out with Playstation partisans. We make certain decisions, often for unknown and emotional reasons, then we’ve got to justify those decisions after the fact.  The more you’ve invested into that choice, the more stubbornly you will defend it.

Since they’re not going anywhere in the mean time, we might as well amuse ourselves as they go through their mental gymnastics, explaining how each new fall for the ruble is merely a “tactical retreat,” and how every state visit Putin makes means another country ripped out of the “Anglo-American” sphere of influence and seated firmly in Russia’s camp of allies.  At the same time every piece of bad economic news from the US or European Union, no matter how insignificant, will be portrayed as the harbinger of the economic apocalypse. When you point out Russia’s failures, expect them to start talking about China versus the United States, as though China is somehow a substitute for Russia or that China’s success somehow negates Russia’s disaster. Push them a little more and they’ll most likely start blabbering about Zionist conspiracies, gold, and freemasons.  It’s going to be hilarious.

Vladimir Bundy

Among the many shows I was strictly forbidden to watch as a child was the notoriously raunchy-for-network TV sitcom Married with Children. Russians might recognize this show by its localized incarnation, Счастливы вместе(Happy Together) on the TNT network. For those too young to remember, the show revolved around the dysfunctional Bundy family, with the hapless father Al at the center. Along with The Simpsons, the show pushed back against the unrealistic, family-friendly sitcoms which had thereto dominated American TV.

One of the show’s recurring gags was Al Bundy constantly mentioning the fact that he once scored four touchdowns in a single football game back in high school. This was the crowning achievement of his life, and he loved shoehorning that bit of local sports trivia into many a conversation. Bundy became a trope- a dissatisfied middle-age man who holds on to one glorious moment in his past. It’s amusing, but somewhat tragic.

There’s another middle-aged bald man who likes living on his past glory, none other than Russian president Vladimir Putin. In his case, that past glory was stabilizing the country after the “Wild 90’s.” I know Russian liberals and other opposition-minded people out there will pillory me for this, but I have always given the man credit where it was due. He did manage to stop the bleeding and the patient did recover for several years. Then again, the country had nowhere to go at that point; anyone who was not a fat, dancing drunkard had a pretty good shot at improving Russia’s lot. It just so happens that the man was Vladimir Putin.

Unfortunately, after he stopped the bleeding, Putin left the patient unattended. He wasn’t so much concerned with actual recovery as he was securing power for himself and his friends. Local power brokers would be allowed to rule their roosts with impunity so long as they pledged their loyalty. The media had to be under the control of his supporters. Again, someone had to do something about the Yeltsin-era oligarchs and gangsters, but what was needed was far more than what Putin had in mind. After snatching power away from them, he should have prepared the road to the future by building up democratic institutions in Russia, strengthening the rule of law. In short, he should have planned for a Russia without him at the helm. Instead what we got is a managed “reality show” as Peter Pomerantsev has called it, where Putin’s official “opposition” is nothing but a sham. Via all manner of restrictions, threats, intimidation, and media pressure, the system has eliminated any threat of political opposition outside of the approved parties.

This is why the actual opposition ended up coalescing around a simple blogger; they simply couldn’t find a better leader. Do I really need to point out the severe danger of eliminating any potential pool of actual leadership for Russia? So much has been invested into the image of Putin, the only man capable of leading Russia, that it couldn’t be transferred to Medvedev. Neither Zyuganov nor Zhirinovsky can take over for Putin.  He made the slogan “If not Putin, then who” a self-fulfilling prophesy.

Now here we are in 2015, as Putin’s desire to hold onto power has led him to provoke an actual confrontation with the West as the economy goes down in flames. Still, his supporters bid us to, “remember the 90’s.” The 90’s!  Already the economy is showing similarities with the 90’s, yet we’re still supposed to fall back on Putin’s accomplishments in his first term. Will they still be talking about the 90’s when nearly all those conditions are present again? Will they talk about the 90’s if it actually gets worse than the 90’s? Are Yeltsin’s 90’s so much worse than Putin’s future 90’s?  Indeed, I imagine a scene of utter destitution three years down the road, and some hack will be yammering on about the horrible 90’s.  One day these people will look even more ridiculous than they do now.

You know Richard M. Nixon created the EPA and ended the Vietnam War, right? Of course he also illegally expanded that war and later on it was discovered that he had been abusing his powers in a myriad of ways. The point here is that leaders cannot keep falling back on one accomplishment, especially one which was due to many other factors. Putin’s success after the 90’s is essentially his four touchdowns in one game, or since Putin probably doesn’t know too much about American football- four ippons in one tournament.

Problem is, though, that the clock keeps ticking, and the years keep marching further and further way from 2000. Tell someone in 2025 that it was worse more than a quarter of a century ago and their response will be a sarcastic, “Really?” If it gets to the point where those 90’s conditions do come back, or if conditions get worse, people throwing out that line are going to have a problem. A government needs to either continue providing concrete gains and progress, or it needs to move out of the way to let others take a shot. In most industrialized countries, there’s a mechanism for accomplishing this. Russia lacks this, and thus we are forced to continually hear about Vladimir Bundy’s four touchdowns in one high school game back in the early 2000’s again and again. Well that and weird musings about bears eating berries in the forest and how the global economy’s “inevitable” growth will somehow save Russia in two years.  Damn.  Married with Children was more uplifting than this!

The Smartest Man in the Room

One striking thing about the current Russian crisis is the utter lack of ideas among the top leadership as to how to save the country’s economy. In his press conference last week, Putin said recovery would take two years. How the government would achieve this or even what “recovery” would look like went unmentioned. Putin simply said that the global economy(You know that hegemonic monster Russia’s supposedly opposing?) was growing, and therefore Russia’s growth was “inevitable.”

It would seem the basic plan for Russia’s growth revolves around having the president visit country after country while the media declares each one to be a new partner that will save Russia. First there was China, then Turkey, then India. Strangely though, the media love affair with each country tends to taper off shortly after each visit and each deal is announced. They stopped crowing about China probably because the latter is paying for Russia’s energy in filthy US dollars, plus the fact that China’s credit agreements with Russia are remarkably similar to the deals they have made with Central Asian and even African nations. In other words, the deals are set to benefit China most of all. The fervor over Turkey died down, possibly when people suddenly remembered that Turkey is a member of NATO and its government is decidedly anti-Assad in the Syrian conflict. As for India, well, India has no interest in picking fights with the West, which has a lot more to invest in the country.

Never do we see concrete measures, only babbling about bears in the forest, how Russia will supposedly endure, and how some other country will somehow come along and save Russia.It’s clear there is no plan.

Back when I started this blog in 2013, my impression of Putin was that he was a cold-hearted realist. He had many failings, but unlike the other clowns who work in the circus that includes Russia’s government and media apparatus, Putin was supposed to be rational. I should have known something was wrong from the way he responded to the opposition in 2012. Initially it did seem as though Putin, ever the realist, would start to liberalize the country. Feeling secure in his power, he would try to offset the offense of taking a third term by giving the people more opportunities to vent their anger about it. Was I ever wrong!

Looking back I think the reason I was so wrong had to do with the fact that Putin had more information than I. To me, the years of 2010-2012 were quite good. Many others would agree. Putin on the other hand, knew better. He had access to information as to where the economy was heading. He must have known about the debt problems of regions, and the capital flight. Perhaps that’s why he seized power again in the first place- he couldn’t trust Medvedev to rule in the wake of opposition and an economic crisis he knew was coming sooner or later. Whatever the case, he knew and I didn’t.

In spite of his greater access to information, I was wrong about Putin being rational. No doubt after so many years of listening to utter morons advise him on Russian society and external politics, he began to believe their propaganda. It was no longer a matter of these pseudo-intellectuals propagandizing the masses while Putin remained in the real world. He too must have tumbled down the rabbit hole and into Wonderland. If some of his statements on the Crimea’s alleged “holy” status to Russians didn’t prove it some time ago, his behavior at the recent press conference certainly suggest he has, as Angela Merkel stated, lost touch with reality.

I really hate making Hitler references, but when imagining the future of this nation I cannot help but be reminded of the words of Hitler’s personal secretary, Traudl Junge. In what became immortalized in the German film Das Untergang(The Downfall), Junge was asked to type out the German dictator’s political will and testament just before he went to commit suicide along with his lover Eva Braun. Speaking about this moment in an interview for the classic WWII documentary series The World at War, Junge said she was incredibly excited because she felt that he was the one man who knew how everything would end, and finally she would find out what all this bloodshed and destruction had been for. As he began to dictate, however, she suddenly felt disappointed to hear the same sort of propaganda he’d always used in his speeches. There was no answer, no explanation.

Vladimir Putin, of course, is no Hitler. Let us make no mistake in that respect. The key comparison here has to do with the way one man consolidates power into his hands, and then increasingly isolates himself from the people and eventually reality. Like with Hitler, Putin’s underlings vie for position, eager to bring him good news or to potentially impress him by harassing or punishing “fifth columnists.” If the research to date is correct, Putin does not use the internet and instead gets his information from various advisers who visit him. Maybe Putin suspects their loyalty to him, but then again maybe he doesn’t. When at his press conference a Chechen reporter asked him about the creation of a union of Slavic countries to counter a non-existent union of “English-speaking countries,” perhaps the president was just being diplomatic in not dismissing the idea as absurd. Or is it possible that Putin actually believes that a Russian-led bloc of Slavic countries is actually feasible in a world where the majority of Slavic countries are already in NATO, the EU, both, or are in the process of joining NATO and the EU? We simply do not know. Only Putin knows.

Junge had incorrectly believed that Hitler actually had some kind of plan, that he knew how everything was going to end in 1945. A lot of people, coming from different points of view, would like to believe that Putin has some kind of plan for Russia, especially considering that oil prices are unlikely to ever recover to triple digits in the next few years, and the country’s natural gas monopoly is soon ending. I would like to think he has a plan, not because I have any affinity for Putin, but simply because he is the one with the power, power he willfully appropriated for himself. Sadly, however, all evidence suggests that Vladimir has no plans beyond self-preservation. Junge was disappointed to hear that the big secret that was supposed to explain the Second World War was nothing but a par-for-the-course rant about “world Jewry,” the same thing Hitler had always ranted about. In the case of Putin, the answer for all Russia’s woes will most likely be the same as it always was. It’s the Americans, it’s the West, Russia’s sovereignty, her “special path,” and of course all of this peppered with various anecdotes from Russian history. The man who ought to know everything, insofar as he designed the system thus, know’s nothing.

Sanctions

So apparently a new round of sanctions is set to be levied. Last I heard, the EU said there’s evidence that Russian army forces may still be on the Ukrainian side of the border. I’m guessing they’re seeing a lot of new dachas, the tell-tale sign of the modern Russian army. In any case, this of course must be met by another impotent “retort,” from the Russian government, which will inevitably hurt the Russian people more than anyone in Europe.

AH-HA! The Russian army has been here! This is a tell-tale sign!

AH-HA! The Russian army has been here! This is a tell-tale sign!

Do I worry about this? Yes, but not for the reason some might expect. There were economic problems in 2008-2012, but the difference was that people spoke openly about whose fault it was. People voiced their anger and dissent. The media’s attempts to redirect their anger at America didn’t work.  Every Russian knew, whether they were willingly to admit it in public or not, that NATO and America had nothing to do with the money that got skimmed off of government projects. NATO wasn’t responsible for the physical or sexual abuse of Russian conscripts, nor did NATO feed them dog food.  And of course, everyone knew that the elite of Russia love the West, since they spend so much time their on vacation, studying, investing money, etc., not to mention buying all the Western products they could get their hands on because they firmly believe that Western = superior.

Now it’s different, however. People are acting like they somehow forgot all that. People are ignoring the shit they see right in front of their eyes, because “The Crimea is ours!”  They’re laughing at sanctions, having no idea what this is doing for their future. They’re actually believing what the TV says.  I’ve seen another author point out how the popular support of Putin’s Russia is really a myth. People answer one way in opinion polls, but they don’t back these opinions with actions. That’s very true, but as long as they keep saying they support the government, people will believe this is mainstream and that they should go along with it. I have no doubts that many people who joined opposition marches in 2011-2012 were similarly jumping on a bandwagon and nothing more.

It’s one thing for the economy to go to hell and then the people turn their attention to the government who was responsible. But in this case, even as people start to feel the effects they will blame America and Europe. This in spite of the fact that Putin’s “answer” to the sanctions did what the EU/US sanctions specifically tried to avoid- they actually hurt ordinary Russian citizens.  Unfortunately there is this idea in Russia that ordinary people should sacrifice for some kind of common good, but in this case there is no common good. The sacrifice of ordinary Russian citizens will be to the elite which treats them with contempt and steals their wealth and future.  When it comes to sacrifice, the common Russian worker will have to give up his Western gadgets and imported food, but rest assured that the elite of the Rublevka neighborhoods won’t be sacrificing anything.

Look, I know I’m going to break the hearts of a lot of Putinophiles here, but Russia as we know it is going down. The illusion won’t last forever. The leaders of the Kremlin aren’t too concerned about ordinary people because they believe them to be stupid cattle which can either be controlled by propaganda or at least suppressed by force. They believe that the only problem with Nicholas II or Gorbachev is that they weren’t hard enough. They should have cracked down on the people harder, and perhaps fired more live rounds into the thronging masses. Because you know, no dictator ever thought of that before, and of course if any did it must have worked out, right?

One might think that sounds hopeful, but the problem I see is that while the Kremlin can’t indefinitely maintain the illusion, it has managed to prolong it considerably. Whereas anger and resentment built from the mid-2000’s and exploded with the elections in 2011, at the moment it almost feels like Putin pressed the reset button. That means that the country will have to sink much, much lower before people start waking up again.Then the movement which develops to replace the system might not be so pleasant. In fact it would probably resemble Maidan, with a considerable right-wing and neo-liberal component. Ukraine provides another example when you look at the difference between the Orange Revolution, which was largely liberal in character with a far less overt nationalist side, and Euromaidan, in which nationalists took on a vanguard role. So then if 2011-2012 in Moscow was comparable to the Orange Revolution in terms of its composition, what will an opposition movement in 2016, 2018, or 2020 look like? I’d rather not see for myself.